Stay on circle rate order puts question mark on 2 in queue

Stay on circle rate order puts question mark on 2 in queue

The AAP government had revised the circle rates for agricultural land from Rs 53 lakh per acre to Rs 3.5 crore per acre.With the Lieutenant Governor putting on hold the Delhi government’s notification revising circle rates of agricultural land, two more proposals that depend on the approval of the notification will also have to wait.

The notification revising circle rates was a component in the proposal to have varying circle rates for flats in multi-storey buildings, depending on their location, said sources. The clearance of the notification would also enable the government to bring the rent on leased flats under the purview of circle rates.

“Having the same circle rate for flats located across Delhi was illogical. There was a flaw in the existing rules which the government wanted to remedy by charging different circle rates on flats in different locations. For instance, a flat located in Vasant Vihar and one located in Rohini cannot have the same circle rates. The circle rate has to be determined not just by cost of the land and the construction but also the market dynamic. The proposal, however, was also a part of the file that is awaiting Lt Governor Najeeb Jung’s nod,” said a government official.

Sources said that in order to bring in more transparency, the government also intended to bring rent charged on flats under circle rates of the area to avoid under valution of property.

“At present, there is no system to monitor rent charged on a flat. A person can charge any amount as rent. The Collector of Stamps cannot question the amount as he has no benchmark. If levy of rent is also brought under the circle rate system, duty evasion can be avoided,” said a senior official.

Government officials explained that at present, the circle rate is determined using two methods. In one the cost of land and the cost of construction is added and then divided by the number of flats in a building. The purchaser then pays per sq m of the plinth area. The other method is relying on the sale-purchase data available on property portals online to see the rate commanded by a property or to examine the underlying price when banks allow mortgages.

The AAP government had revised the circle rates for agricultural land from Rs 53 lakh per acre to Rs 3.5 crore per acre. The Lt Governor had called for the file, claiming that the notification was approved by the government without sending the concerned file to him. He had sought the file to “examine the legal and constitutional aspects of the notification”.

On Monday, Jung had told the government that the notification needs to be studied further to avoid confusion in the future and its “implementation should be held up”.